07 March 2021

Tax Justice Network: Corporate Tax Haven Index - 2021 Results

The Corporate Tax Haven Index is a ranking of jurisdictions most complicit in helping multinational corporations underpay corporate income tax. Tax haven ranking shows countries setting global tax rules do most to help firms bend them.

Corporate Tax Haven Index - 2021 Results The Corporate Tax Haven Index thoroughly evaluates each jurisdiction's tax and financial systems to create a clear picture of the world’s greatest enablers of global corporate tax abuse, and to highlight the laws and policies that policymakers can amend to reduce their jurisdiction’s enabling of corporate tax abuse.

Jurisdictions are ranked by their CTHI value (Corporate Tax Haven Index value), which is calculated by combining a jurisdiction’s Haven Score and Global Scale Weight. A jurisdiction’s Haven Score is a measure of how much scope for corporate tax abuse the jurisdiction’s tax and financial systems allow and is assessed against 20 indicators. A jurisdiction’s Global Scale Weight is a measure of how much financial activity from multinational corporations the jurisdiction hosts. Combining a jurisdiction’s Haven Score and Global Scale Weight gives a picture of how much of the world's corporate financial activity is put at risk of corporate tax abuse by the jurisdiction.

___________________________________________________________________________________

A club of rich countries determining global rules on corporate tax are responsible for over two-thirds of global corporate tax abuse, reports the Corporate Tax Haven Index 2021, a ranking of countries most complicit in helping multinational corporations pay less tax than they are expected to. The index documents the ways in which global corporate tax rules set by the OECD¹, a membership organisation made up of high income countries and the world’s leading rule-maker on international tax, failed to detect and prevent corporate tax abuse enabled by the OECD’s own member countries – and in some cases, pushed countries to rollback their tax transparency.

Leading economists and campaigners from around the world are calling for OECD tax rules to be superseded by a more robust and globally inclusive process at the United Nations, beginning with a UN tax convention², to clamp down on global corporate tax abuse and raise the public funding urgently needed to address the economic toll of a pandemic now entering its second year.

In a further blow to deteriorating trust in the OECD group’s ability³ to tackle the rampant global corporate tax abuse that costs the world $245 billion in lost corporate tax a year⁴, the Corporate Tax Haven Index 2021 finds OECD countries and their dependencies to be responsible for 68 per cent of the world’s corporate tax abuse risks. Broken down, OECD countries are responsible for 39 per cent of the world’s corporate tax abuse risks and their dependencies – like the UK’s Crown Dependency Jersey and the Netherlands’ Aruba – are responsible for 29 per cent. Dr Dereje Alemayehu, executive coordinator of the Nobel Peace Prize-nominated⁵ Global Alliance for Tax Justice, said “to trust the OECD in light of the index’s findings today is like trusting a pack of wolves to build a fence around your chicken coop.”

 

Top 10 greatest enablers of corporate tax abuse risks

The 2021 edition of the Tax Justice Network’s biennial Corporate Tax Haven Index sees OECD countries or their dependencies take up the top six spots on the ranking of the world’s greatest enablers of corporate tax abuse. These are, in descending order, the British Virgin Islands, Cayman and Bermuda – three British Overseas Territories where the UK government has full powers to impose or veto lawmaking and where power to appoint key government officials rests with the British Crown – the Netherlands, Switzerland and Luxembourg.

The world’s top 10 biggest enablers of global corporate tax abuse today are:

1. British Virgin Islands (British Overseas Territory)
2. Cayman Islands (British Overseas Territory)
3. Bermuda (British Overseas Territory)
4. Netherlands
5. Switzerland
6. Luxembourg
7. Hong Kong
8. Jersey (British Crown Dependency)
9. Singapore
10. United Arab Emirates

 

Tax Justice Network

© Tax Justice Network